[1-1] It is a general principle of law that no one may be permitted to

LIGA vs. ALLEGRO change his mind or disavow and go back upon his own acts, or
1) LIGA vs. ALLEGRO RESOURCES to proceed contrary thereto, to the prejudice of the other party.

575 SCRA 310 (Art. 1159) Likewise, it is settled that if the terms of the contract clearly
express the intention of the contracting parties, the literal
Facts: meaning of the stipulations would be controlling.

· Ortigas & Company, Limited Partnership entered into a lease
agreement with La Paz Investment & Realty Corporation
wherein the former leased to the latter its parcel of land located
in San Juan. La Paz constructed the Greenhills Shopping
Arcade and divided it into several stalls and subleased them to
other people. One of the sub-lessees was Edsel Liga (Liga),
who obtained the leasehold right to Unit No. 26, Level A of the
GSA.
· As the lease expired, the stallholders made several attempts
to have their leasehold rights extended.
3. Law and jurisprudence support the award of attorney's fees
and costs of suit in favor of Allegro. Attorney's fees and costs
of litigation are awarded in instances where "the defendant
acted in gross and evident bad faith in refusing to satisfy the
plaintiff's plainly valid, just and demandable claim." Having
delivered possession over the leased property to Liga, Allegro
had already performed its obligation under the lease
agreement. Liga should have exercised fairness and good
judgment in dealing with Allegro by religiously paying the
agreed monthly rental of P40,000.00.

· Allegro Resources became the new lessee. As the new

lessee, Allegro offered to sublease Unit No. 26, Level A to
Liga. They entered into a lease agreement dubbed Rental
Information in which Liga agreed to pay rental of P40K
monthly. She also agreed to pay the back rentals due Ortigas.
Liga also gave P40K as one month advance rental and another
P40K as one month security deposit as provided in the
agreement.

· Liga failed to pay the subsequent due rent. Despite repeated

demands from Allegro, Liga had failed to pay her rentals for the
subleased property, as well as the back rentals from January
to August 2001 due Ortigas.

Issues:

1. WON Liga should pay to Ortigas back rentals covering the

period 1 January 2001 to 31 August 2001? NO

2. WON Liga should pay to Allegro back rentals in the amount

of P40K a month starting from 1 September 2001 until such
time as she vacates the leased property? YES

3. WON Liga should pay to Allegro the amount of P20K as

attorney's fees and the costs of suit? YES

Held:

1. (1) Ortigas is not a party to this case, whether as plaintiff or

otherwise. It is basic that no relief can be extended in a
judgment to a stranger or one who is not a party to a case. (2)
Allegro cannot justify the award as a legal representative by
virtue of a provision in its lease agreement with Ortigas. Allegro
did not aver in its complaint that it was acting as Ortigas's legal
representative and seeking the back rentals due Ortigas. (3)
There is no allegation or prayer in the complaint that Allegro
was seeking the collection of the back rentals due Ortigas.

2. The Court cannot countenance the obstinate refusal of Liga

to pay P40K a month to Allegro since she had already
acquiesced to pay such rental rate when she signed the Rental
Information. It is fundamental that a contract is the law
between the parties. Obligations arising from contracts have
the force of law between the contracting parties and should be
complied with in good faith.
[1-2] property necessarily belonged to his conjugal partnership with
Jovellanos vs. Court of Appeals his said second wife.
JOVELLANOS vs. CA
210 SCRA 126 (Art. 1164) NB: But since it pertained to the second wife, she is still liable
to pay the corresponding reimbursements to the petitioners
Facts: who helped pay for the amortization of the house and lot.
Daniel Jovellanos and Philamlife entered into a a lease and Remember Article 118 of the Family Code on property bought
conditional sale agreement over a house and lot. At that time, on installments, where ownership is vested during the
Daniel Jovellanos was married to Leonor Dizon, with whom he marriage, such property shall belong to the conjugal
had three children, the petitioners. partnership.

Leonor Dizon died consequently. Then Daniel married private

respondent Annette with whom he begot two children. The
daughter from the 1st marriage Mercy Jovellanos married Gil
Martinez and at the behest of Daniel Jovellanos, they built a
house on the back portion of the premises.

With the lease amounts having been paid, Philamlife executed

to Daniel Jovellanos a deed of absolute sale and, on the next
day, the latter donated to herein petitioners all his rights, title
and interests over the lot and bungalow thereon. In 1985,
Daniel died.

Private respondent Annette H. Jovellanos claimed in the lower

court that the aforestated property was acquired by her
deceased husband while their marriage was still subsisting and
which forms part of the conjugal partnership of the second
marriage. Petitioners contend that the property, were acquired
by their parents during the existence of the first marriage under
their lease and conditional sale agreement with Philamlife of
September 2, 1955.

Issue:
WON the house and lot pertains to the second marriage? YES

Held:
The conditional sale agreement in said contract is, therefore,
also in the nature of a contract to sell, as contradistinguished
from a contract of sale. In a contract to sell or a conditional
sale, ownership is not transferred upon delivery of the property
but upon full payment of the purchase price. Generally,
ownership is transferred upon delivery, but even if delivered,
the ownership may still be with the seller until full payment of
the price is made, if there is stipulation to this effect. The
stipulation is usually known as a pactum reservati dominii, or
contractual reservation of title, and is common in sales on the
installment plan. Compliance with the stipulated payments is a
suspensive condition. The failure of which prevents the
obligation of the vendor to convey title from acquiring binding
force.

Daniel consequently acquired ownership thereof only upon full

payment of the said amount hence, although he had been in
possession of the premises since September 2, 1955, it was
only on January 8, 1975 that Philamlife executed the deed of
absolute sale thereof in his favor.

Daniel Jovellanos did not enjoy the full attributes of ownership

until the execution of the deed of sale in his favor. The law
recognizes in the owner the right to enjoy and dispose of a
thing, without other limitations than those established by law,
19 and, under the contract, Daniel Jovellanos evidently did not
possess or enjoy such rights of ownership.
Upon the execution of said deed of absolute sale, full
ownership was vested in Daniel Jovellanos. Since. as early as
1967, he was already married to Annette H. Jovellanos, this
[1-5]
CORTES vs. Court of Appeals
494 SCRA 570 (Art. 1169)
Facts:
For the purchase price of 3.7M, Villa Esperanza Development
Corporation (vendee) and Antonio Cortes (vendor) entered into
a contract of sale over the lots located at Baclaran, Parañaque,
Metro Manila. The Corporation advanced to Cortes the total
sum of P1,213,000.00. In September 1983, the parties
executed a deed of absolute sale on the following terms:
The Corporation shall advance 2.2 M as downpayment, and
Cortes shall likewise deliver the TCT for the 3 lots.
The balance of 1.5M shall be payable within a year from the
date of the execution.
TCTs, while the Corporation is yet to pay in full the agreed
down payment of P2,200,000.00. This mutual delay of the
parties cancels out the effects of default, such that it is as if no
one is guilty of delay.
Under Article 1169 of the Civil Code, from the moment one of
the parties fulfills his obligation, delay by the other begins.
Since Cortes did not perform his part, the provision of the
contract requiring the Corporation to pay in full the down
payment never acquired obligatory force.

The Corporation filed the instant case for specific performance

seeking to compel Cortes to deliver the TCTs and the original
copy of the Deed of Absolute Sale. According to the
Corporation, despite its readiness and ability to pay the
purchase price, Cortes refused delivery of the sought
documents. It prayed for damages, attorney’s fees and
litigation expenses. Cortes claimed that the owner’s duplicate
copy of the three TCTs were surrendered to the Corporation
and it is the latter which refused to pay in full the agreed down
payment.

RTC rendered a decision rescinding the sale and directed

Cortes to return to the Corporation the amount of
P1,213,000.00, plus interest. CA reversed the decision and
directed Cortes to execute a Deed of Absolute Sale conveying
the properties and to deliver the same to the Corporation
together with the TCTs, simultaneous with the Corporation’s
payment of the balance of the purchase price of
P2,487,000.00.

Issue:
WON Cortes delivered the TCTs and the original Deed to the
Corporation? NO.
WON there is delay in the performance of the parties’
obligation that would justify the rescission of the contract of
sale? THERE IS DELAY IN BOTH PARTIES (compensation
morae)

Held:
Cortes avers that he delivered the TCT’s through the broker’s
son. He further avers that the broker’s son delivered it to the
broker, who in turn delivered them to the Corporation.

Marcosa Sanchez’s unrebutted testimony is that, she did not

receive the TCTs. She also denied knowledge of delivery
thereof to her son, Manny.

What further strengthened the findings of the Court of Appeals

that Cortes did not surrender the subject documents was the
offer of Cortes’ counsel at the pre-trial to deliver the TCTs and
the Deed of Absolute Sale if the Corporation will pay the
balance of the down payment. Indeed, if the said documents
were already in the hands of the Corporation, there was no
need for Cortes’ counsel to make such offer.

Considering that their obligation was reciprocal, performance

thereof must be simultaneous. The mutual inaction of Cortes
and the Corporation therefore gave rise to a compensation
morae or default on the part of both parties because neither
has completed their part in their reciprocal obligation. Cortes is
yet to deliver the original copy of the notarized Deed and the
[1-6] Petitioner did not incur delay in the performance of its
Titan-Ikeda Construction vs. Primetown obligation.

TITAN-IKEDA CONST. vs. PRIMETOWN

544 SCRA 466 (Art. 1169)

Facts:

The parties entered into a contract for a piece of work when

they executed the supplemental agreement. Respondent
Primetown Property Group, Inc. awarded the contract for the
structural works of its 32-storey Makati Prime Tower (MPT) to
petitioner Titan-Ikeda Construction and Development
Corporation. Titan-Ikeda as contractor bound itself to execute
the project for respondent, the owner/developer, in
consideration of a price certain P130M. (The supplemental
agreement was reciprocal in nature because the obligation of
respondent to pay the entire contract price depended on the
obligation of petitioner to complete the project.)

ITI estimated that petitioner should have accomplished 48.71%

of the project as of the October 12, 1995 takeover date.
Petitioner repudiated this figure but qualifiedly admitted that it
did not finish the project. Records showed that respondent did
not merely take over the supervision of the project but took full
control thereof.

Because the parties agreed to extinguish the supplemental

agreement, they were no longer required to fully perform their
respective obligations. Petitioner was relieved of its obligation
to complete the project while respondent was freed of its
obligation to pay the entire contract price.

Issue:
WON there was delay on the part of petitioner Titan-Ikeda? NO

Held:
Mora or delay is the failure to perform the obligation in due
time because of dolo (malice) or culpa (negligence). A debtor
is deemed to have violated his obligation to the creditor from
the time the latter makes a demand. Once the creditor makes a
demand, the debtor incurs mora or delay.

Construction Contact:
If at any time during the effectivity of this contract,
[PETITIONER] shall incur unreasonable delay or slippages of
more (15%) of the scheduled work program, [RESPONDENT]
should notify in writing to accelerate the work and reduce, if not
erase, slippage. If after the lapse of sixty (60) days from receipt
of such notice, [PETITIONER] fails to rectify the delay or
slippage, [RESPONDENT] shall have the right to terminate this
contract except in cases where the same was caused by force
majeure.

Respondent never sent petitioner a written demand asking it to

accelerate work on the project and reduce, if not eliminate,
slippage. If delay had truly been the reason why respondent
took over the project, it would have sent a written demand as
required by the construction contract. Moreover, according to
the October 12, 1995 letter-agreement, respondent took over
the project for the sole reason that such move was part of its
(respondent’s) long-term plan.
Because petitioner did not consent to the change of the
designated construction manager, ITI’s September 7, 1995
report could not bind it.
[1-8]
THE INTERNATIONAL CORPORATE BANK V. SPOUSES
GUECO
351 SCRA 516

FACTS:
Gueco spouses obtained a loan from ICB (now Union Bank) to
purchase a car. In consideration thereof, the debtors
executed PNs, and a chattel mortgage was made over the
car. As the usual story goes, the spouses defaulted in
payment of their obligations and despite the lowering of
the amount to be paid, they still failed to pay.
Thereafter, they tendered a manager’s check in favor of
the bank. Nonetheless, the car was still detained for the
spouses refused to sign the joint motion to dismiss. The bank
averred that the joint motion to dismiss is part of
standard office procedure to preclude the filing of other
claims. Because of this, the spouses filed an action for
damages against the bank. And by the time the case was
instituted, the check had become stale in the hands of the
bank.

HELD:
The main issue though unrelated to Negotiable Instruments
Law in this case was whether or not the signing of the joint
motion to dismiss a part of the compromise agreement
between the spouses and the bank. The answer is no, it is not
a part of the compromise agreement entered by the parties.
And thus, the signing is dispensible in releasing the car to the
spouses. And on the ancillary issue of the case, which is the
relevant issue for the subject, whether or not the spouses
should replace the check they paid to the bank after it
became stale, the answer is yes. It appeared that the
check has not been encashed. The delivery of the manager’s
check did not constitute payment. The original obligation to pay
still exists. Indeed, the circumstances that caused the non-
presentment of the check should be considered to
determine who should bear the loss. In this case, ICB held on
the check and refused to encash the same because of the
controversy surrounding the signing of the joint motion to
dismiss. There is no bad faith
or negligence on the part of ICB.

A stale check is one which has not been presented for

payment within a reasonable time after its issue. It is
valueless and, therefore, should not be paid. A check should
be presented for payment within a reasonable time after
its issue. Here, what is involved is a manager’s check,
which is
essentially a bank’s own check and may be treated as a PN
with the bank as a maker. Even assuming that presentment is
needed, failure to present for payment within a reasonable
time will result to the discharge of the drawer only to the
extent of the loss caused by the delay—but here there is
no loss sustained. Still, such failure to present on time does not
wipe out liability.